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Fiat Currency Vs Gold Standard which is better?

I'm having trouble with this argument which is better Fiat Currency or Gold standard. As inflation keeps on rising I've been thinking that maybe going Fiat currency was the wrong way to go for the government, Should we change it back to gold standard if possible?


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    • Jun 15 2011: Jame's point on how "[money] supply in Developed economies could never be backed by Gold in such a spurious way, when the overall wealth of nations (houses, railways, internet companies etc) is massively massively more than currency reserves or indeed the amount of Gold" really gave me something to think about. That we might really not have enough gold to go around if we actually went gold standard, but on the other hand I feel that Fiat currency is the wrong way to go. Fiat currency seems to be baseless and has not merits when we keep printing money.

      I just fear one day we might have too much of the fiat currency with no backing (just government saying it has value) in circulation might just collapse due to the inability to control the inflation.

      On a very wild note maybe we could back currency based on carbon emission ( Lesser emission = higher value) but that would be crazy.

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